January 2025 Category M prices announced
The Drug Tariff Category M pricelist for January 2025 has been published on the NHS Business Services Authority (NHSBSA) website.
Based on our analysis of the Category M price list for January 2025, Community Pharmacy England estimates there will be an overall reduction in reimbursement of approximately -£34m per quarter, resulting from the combination of:
- A margin adjustment of -£17.9m informed by the latest results from the margin survey of independent pharmacies
- An adjustment to reflect movements in the underlying market (i.e. movements in buying prices of medicines). These are systematic and not subject to negotiation.
- Entry of new generic medicines into Category M
Results from the Margin Survey of Independent Community Pharmacies up to Q1 2024/25 indicated that there remained an over delivery of margin, and therefore in the normal course of business a reduction in the Drug Tariff would be expected. However, in discussions with the Department of Health and Social Care (DHSC), Community Pharmacy England had argued for no reduction in the January Drug Tariff.
As well as stressing the unsustainable financial pressures already being experienced by English pharmacy businesses, making further reductions impossible to absorb, we argued that it was inappropriate to enact material changes to pharmacy contractor funding while contract negotiations for 2024/25 remain unresolved.
We also remain concerned about the significant number of products being reimbursed at economically unviable prices; the NHS focus on low prices over stability of supply continues to drive disruptions in availability, leading to hundreds of products requiring emergency concession status, and putting patients’ access to medicines at risk. Further reductions in reimbursement prices will only exacerbate these issues.
The matter was ultimately referred to Ministers, who determined that a margin adjustment would be applied to the January Drug Tariff.
